Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 114.607 | EURUSD 1.07010 | AUDUSD 0.75582 | NZDUSD 0.71693 | USDCAD 1.33203 | USDCHF 1.00199 | GBPUSD 1.23756 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.07500 | 1.06983

USDJPY                 114.449 | 113.436

GBPUSD               1.24452 | 1.2369

AUDUSD              0.75792 | 0.75540

USDCHF               1.00170 | 0.99828

USDCAD               1.33287 | 1.32812

NZDUSD               0.72103 | 0.71688

EURGBP               0.86614 | 0.86385

EURCHF                1.07368 | 1.07228

EURJPY                 122.501 | 121.862

For today

• EUR: USD continued to weaken through the session with the Euro steadily moving from the 1.0700 levels to test through to the 1.0750 areas before holding and trading sideways through the session towards the grey hours, Topside offers increasing from the current highs to the 1.0800 areas a push through the 1.0820 areas likely to see stops appearing and another quick move higher with offers through into the congested 1.0860-1.0900 areas and into early 2016 ranges. Downside bids light through to the 1.0700 areas with weak stops on a move through the 1.0680 areas with light bids into the 1.0640-60 levels, limited data for the day and the market waiting on the next Trump comment or Brexit discussion.
• GBP: Moving quietly from the 1.2380 levels the market moved into the Tokyo session pushing the 1.2390 levels then pushing through the 1.2400 levels with limited stops triggered on the initial move and pushing steadily through the 1.2440 areas before peaking and drifting back towards the 1.2420 levels into the grey hours, Topside offers into the 1.2450 areas are likely to be reasonably strong with those offers likely to be backed with better 1.2500 levels with stops building behind the levels, Downside bids nervous at best but into the 1.2350 areas with possible congestive bids and range bids likely through to the 1.2300 levels, a move through the level will likely see some stops and the bids returning around the sentimental levels but open to a larger downside on a push through the 1.2250 areas.
• JPY: USDJPY opened 20pips lower from the Friday close and as the early Tokyo market moved into place dropped again through the 114.00 levels and trading in a tight range between 113.80-114.00 for a few hours before dipping again through to the 113.40’s and a quiet run through to the grey hours, Downside bids into the 113.40 levels with those bids likely to continue down through the 113.00 areas and weak stops on a dip through the 112.80 level and then the market seeing some weakness appearing on a move lower and better bids into the 112.00-111.80 areas, Topside offers light through the 114.00 areas and the market seeing weak stops on a return through the 114.60 areas with limited congestion through the 115.00 level.
• AUD: The Oz eased higher a little through the session pushing into the Tokyo session 15 pips higher from the opening around the 0.7560 areas and running into light resistance around the 0.7578-80 areas and then holding steady through to the grey hours with little change from the opening. The Oz sees light bids into the 75 cent level with the market likely to struggle through to the 0.7450 areas with congestive bids likely into the 0.7450 areas and likely to increase into 74 cents before some weakness appears, Topside offers from the 0.7570 areas and into the 76 cent level with stops on a move through and the market opens for a test through the 77 cent levels in in time however, today is probably not the day though with very little data and the market relying on news items.

Overnight News                                                                  

USD/JPY:

U.S. Said to Ask Aso to Join Prime Minister Abe on U.S. Visit

JPY/USD:

Free Trade Is ‘Very Important’ to the U.S. as Well: Japan’s Suga

GPIF’s Takahashi Sees More High-Yield US Debt Buys a Possibility

JPY:

Loan Demand from Japanese Cos and Local Governments Rises, BOJ Says

CNY:

PBOC Newspaper Says Temporary Funds Tool to Play Important Role

GBP/USD:

May Said to Explore U.S.-U.K. Worker Movement Deal: Telegraph

SGD:

Singapore December Consumer Prices +0.2% Y/y; Est. +0.1%

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         All Industry Activity Index M/M Nov A 0.30% | C 0.40% | P 0.20% | R 0.00%

13:30     CAD       Wholesale Sales M/M Nov C 0.60% | P 1.10%

15:00     EUR        Eurozone Consumer Confidence Jan (A) C -4.8 | P -5.1

Weekend News

CNY:

PBOC Conducts 60 Billion Yuan China Open-Market Operations
USD/JPY:

Kuroda: Dollar May Rise as U.S. Economy Likely to Grow: Nikkei
USD/CNY:

Trump Needs to Be Cautious About Tariffs on China: Xinhua
USD/CNY/TWD:

Trump Should Respect China’s Policy on Taiwan: Xinhua
USD:

Trump Freezes Obama Pending Rules and Regulations For Reviews
Mattis: Every Action We Take Will Ensure Military Ready to Fight
Kelly: ‘Honoured and Humbled’ to Lead Homeland Security Dept.
Trump Will Back CIA, Says Radical Islamic Terrorism Must End
Trump Signs Obamacare Exec. Order; Commissions for Mattis, Kelly
Trump Spokesman Accuses Media of False Inaugural Reporting
Iran Says Could Ramp Up Nuclear Work If Trump Tears Up Deal: CBC
EUR:

France’s Le Pen Says Brexit Will Create a Domino Effect in EU
Petry Says EU Striving for ‘Homogenization’ of European Peoples
EUR/USD:

Merkel Said to Scour Trump Archive for Clues on How to Read Him
GBP/USD:

U.K. PM May to Visit Trump Next Week, White House Confirms
JPY/USD:

Japan’s Abe Wants to Strengthen ‘Unshakable’ Ties With U.S.
Abe May Meet Trump as Soon as First Half of Next Month: NHK
OIL:

OPEC, Russia Say Oil Cuts Are Deeper and Faster Than Expected
TWD/USD:

Taiwan President Seeks Closer Ties With Trump Administration
SGD:

Lee Says Singapore Can Stimulate Economy If Needed: NewsAsia
SGD/USD/CNY:

Lee Says Singapore Is Friendly With Both U.S., China: NewsAsia
KRW/USD:

1. Korea, U.S. Seek Meet between Envoys to 6-party talks: Yonhap
   AUD/GBP:

Australia Opens Talks With U.K. Over Trade Deals Ahead of Brexit
PHP/CNY:

Philippines’ Dominguez to Talk with China on $15 Billion Deals
TRY:

Turkey Parliament Triggers Referendum on Presidential System

Harry Hindsight

• EUR: The market opened around the 1.0660 levels and drifted into the Tokyo session before heading slowly higher testing into midsession around the 1.0690 areas and ranging into the grey hours, the move into the London session saw the market weaken with light USD buying moving in and German figures in line with expectations, the fall was increased with drag from a falling GBP saw the Euro test to the 1.0630 areas before moving into the NYK session and a slow and steady rise through the opening levels to test the 1.0700 levels into the final hours of the day.
• GBP: Cable moved through into the Tokyo session holding the 1.2340 areas before edging higher in the Tokyo session to the 1.2370 areas, the move through the grey hours saw very little difference, however, into the London session the market started to decline, drifting back through to the opening levels, the release of retail sales saw the market drop quickly back on a bad number and a poor revision of the previous months number and Cable dropped quickly to the 1.2300 levels pushing through some bids to test to the 1.2260 levels just before the NYK session moved in, a weaker USD on the day of the inauguration of Pres. Trump saw the Cable move off the lows and steadily climb through the remainder of the day pushing to the 1.2380 areas for the close.
• JPY: USDJPY moved off the 114.90 areas testing through the early part into Tokyo before dropping back quickly and basing around the 114.60 areas through into the London session, with German numbers in line with expectations and UK numbers totally out of line the market saw the USD find some support through into the NYK session with the USDJPY moving up towards the 115.40 levels before drifting through into the NYK session holding around the 115.00 levels with the occasional dip to the 114.80 areas, the final hours saw the USD come under pressure as the end of the inauguration saw Trump speaking for the world to see with the market eventually running out around the 114.60 areas.
• AUD: The Oz rose from the opening 0.7560 level to test through the 0.7585 areas and the highs for the day, the market then returned to the opening levels for the move into the London session, London was a quick seller of the Oz with the market moving to the 0.7520 levels in the first two hours, the market held the levels and the lows for the day were set and the steady rise through the session to finish the day not far off the opening levels.

Yesterday’s premiership results

CNY        GDP Y/Y Q4 A 6.80% | C 6.70% | P 6.70%

CNY        Industrial Production Y/Y Dec A 6.00% | C 6.10% | P 6.20%

CNY        Retail Sales Y/Y Dec A 10.90% | C 10.70% | P 10.80%

CNY        Fixed Assets Ex Rural YTD Y/Y Dec A 8.10% | C 8.30% | P 8.30%

EUR        German PPI M/M Dec A 0.40% | C 0.40% | P 0.30%

EUR        German PPI Y/Y Dec A 1.00% | C 1.00% | P 0.10%

GBP       Retail Sales M/M Dec A -1.90% | C -0.10% | P 0.20% | R -0.10%

CAD       Retail Sales M/M Nov A 0.20% | C 0.50% | P 1.10% | R 1.20%

CAD       Retail Sales Less Autos M/M Nov A 0.10% | C 0.10% | P 1.40%

CAD       CPI M/M Dec A -0.20% | C 0.00% | P -0.40%

CAD       CPI Y/Y Dec A 1.50% | C 1.70% | P 1.20%

CAD       BoC CPI Core M/M Dec A -0.30% | C -0.20% | P -0.50%

CAD       BoC CPI Core Y/Y Dec A 1.60% | C 1.70% | P 1.50%

Stay lucky

Andy

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